Reaching out to the unreached with medical insurance in East Africa is the strategy that medical insurance provider, Alexander Forbes Healthcare, is using to grow its market share.

From government agencies to local authorities, the firm is moving away from the traditional hunting grounds of providers —big corporates.

Its portfolio ranges from the City Council of Nairobi to the Moi Teaching and Referral Hospital in Eldoret.

“We are approaching these institutions that previously had inhouse health compensation schemes for their workers and offering to shoulder risks,” said Alvin Odhiambo, the head of business development. This is in addition to the corporate world, micro-enterprises, small and medium enterprises and individuals.

Alexander Forbes commands 5.5 per cent of the Kenyan medical insurance market share, with gross premiums to the tune of $6.25 million (Ksh500 million).

The total premiums collected by the 20 medical insurance providers operating in the country stand at about $113.5 million.

The largest player in the market, according to industry statistics, is AAR at 20 per cent of the market share, followed by Jubilee Insurance Company and APA Insurance at 19 and 12 per cent respectively.

Besides the Kenyan market, Alexander Forbes Healthcare also operates in 14 African countries including Uganda and Tanzania.

Mr Odhiambo says that there exists a huge opportunity in Kenya’s untapped market, which he estimates at over 90 per cent of the population of 40 million.

“Opportunities are wide open to serve many people across the country in order to keep a healthy workforce,” he says.

The section of the population that is already covered is no longer attractive, he adds, since most providers are concentrating on them.

“The industry should expand and open its eyes to the different segments that are still available,” said Mr Odhiambo. This will enable them to cash in on the prevailing goodwill since medical insurance is fast picking up in Kenya.

A report by the Association of Kenya Insurers on the state of the industry released last year estimated a 300 per cent growth in profitability in 2008 compared with the previous year.

Among the factors that have been credited for the growth momentum is an improved regulatory mechanism through the Insurance Regulatory Authority.

This has eliminated the nasty experiences that those who took up medical insurance went through in the past.

They included selling the wrong products to the wrong people, that did not address client needs and delays in processing claims.

The industry is also moving away from past rigidities, where there were many exclusions — ailments not covered by the insurance product — and is becoming more friendly.

The coming into force of the East African Community Common Market presents a fresh opportunity for medical insurance providers to extend their reach within the region.

Soon, there will be products for the regional market.

He says that plans by the National Hospital Insurance Fund to increase its participation in the provision of healthcare insurance will improve delivery of service to Kenyans.

With the rapidly increasing cost of healthcare, many people are turning to medical insurance to shoulder the hospital bills.

However, the high cost of healthcare has seen some overshoot their covers.

This is despite the fact that insurance premiums are calculated by actuarial experts who factor in the cost of drugs and hospitalisation in relation to statistics of possible occurrence, and apply this to mathematical models.

This trend has been partly attributed to the shift by many hospitals towards serving the rich with expensive consultation fees and bed charges.

Mr Odhiambo says there is a need to get people to understand better how medical insurance operates.

“Insurance takes away risk; and you do not have to depend on others for fundraising to foot medical bills but yourself,” he adds.

The medical insurance providers will also be required to streamline their operations in order to appeal to the clientele.

Alexander Forbes Healthcare has also gone for reinsurance, in order to maintain stability, and invests in research and proper systems to remain responsive to client needs.

The medical insurer also provides preventative managed care for its customers.